A simple math problem that 90% of contract players cannot solve.
As an experienced player in the crypto market for many years, I want to talk about something real today. Not long ago, I witnessed a small story: someone took 200 yuan and exchanged it for 28 U to rush into the contract market, reaching a maximum of 144 U within two days, and then what? As expected, with just one mistake, it instantly returned to zero.
This is not a matter of luck, but a matter of mathematics. In the game of contract trading, the probability of long-term winning has already been predetermined—it approaches zero infinitely.
Contract: a high-risk "gamble"
Contract trading, especially high-leverage contracts, has the biggest temptation in the amplification effect of profits. Under 5x leverage, if the coin price rises by 2%, the profit can be amplified to 10%. But behind this lies a devil: the same mechanism amplifies losses proportionally when prices fluctuate in the opposite direction.
The cryptocurrency market itself is highly volatile, and prices can experience significant rises and falls in a short time. When high leverage is combined with market volatility, even minor price movements can quickly lead to massive losses and even trigger forced liquidation directly.
Look at the real data: during a crash in August 2024, Bitcoin fell below 60,000 USD, and within 24 hours, 78,000 people faced liquidation, with total liquidation amounts reaching 198 million USD. In another wave of crashes in November of the same year, over 140,000 people were liquidated, with liquidation amounts reaching 363 million USD.
Contract trading is like dancing on a tightrope, with no safety net below. High leverage makes the liquidation price very close to the opening price, and even minor fluctuations can trigger liquidation. Investors using 100x leverage may face liquidation risks when the market fluctuates by 1% in the opposite direction.
Spot: The survival path that allows you to make mistakes
Compared to contracts, spot trading is the most lovable place: it allows you to make mistakes. You can buy at the wrong time, get trapped in fluctuations, but as long as the project has fundamental support, you always have a chance to wait for the next cycle.
I follow two strategies in spot investment:
First, seek stability by choosing 'cash cow' type assets. These assets have a solid ecological foundation, stable output mechanisms (such as staking returns), and relatively mild price fluctuations, serving as the 'ballast' in your portfolio. When prices rise, you are happy, and when they fall, you still earn interest, ensuring you can sleep well even in a bear market.
Secondly, seek progress while maintaining stability, focusing on high-potential ecosystem tokens. In deterministic tracks (such as DeFi, infrastructure), look for targets with products, communities, and narrative space, but with small market capitalization. Spot trading, phased layout, and long-term holding are key.
Opportunity cost: What you lose is not just money
Back to the story of 144U. If at that time you hadn’t traded contracts, but instead bought potential small-cap spot, what would happen? Let’s do the math:
If you buy a potential token with 144U at a unit price of 0.87U, you can hold about 165 of them. Assuming a few years later, the project ecosystem explodes and the unit price rises to 100U, that's 16.5K U; if the trend gets even better and reaches 1000U, that's 165K U.
Liquidation losses from contracts are not only the immediate 144U; they also represent the potential opportunity cost of thousands of times behind it. This is not just losing money; it’s losing the story of 'another universe you' who could achieve financial freedom.
Survival is more important than getting rich quickly
In this market, 'staying alive' is ten thousand times more important than 'making a huge profit once.' Data shows that among users who trade more than 50 times a month, 92% ultimately incur losses.
Contracts are essentially using deterministic risks to gamble on uncertain profits; while holding spot is using uncertain profit space to exchange for a certain survival right. Which one is more worthwhile? Time will give you the answer.
True contract experts are not those who chase hundredfold returns, but rather disciplined executors who can continuously control risks and profit steadily. The market is never short of opportunities; what it lacks are players who survive to the next opportunity.
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